Thursday, June 08, 2006

Glen Ridge Tax Sales

An interesting piece on tax sales in Glen Ridge, NJ. For those who don't know about Glen Ridge taxes, they are some of the highest in the state. The author provides a nice little primer on the tax sales process.

From the Glen Ridge Paper:
Delinquent property taxes costing residents
By Daniel Hooks

Homeowners who failed to pay property taxes last year in Glen Ridge will have their debts sold next week to private investors, who can charge up to 18 percent interest to homeowners on top of the principal debt.

On June 17, Glen Ridge Tax Collector Donna Altschuler will sell the town’s property tax-related debts to private investors in a tax sale; an annual event practiced by virtually every municipality in the state in an effort to regain monies not collected from homeowners.

“The state actively encourages municipalities to sell their debt because the municipality is responsible for collecting taxes and then paying out money to the board of education and the county,” said Michael Rohal, town administrator of the borough.

“If taxes are not collected, the municipality is responsible for paying off any differences to the board of education and county, and therefore it benefits the town to get rid of debt,” said Rohal.

Private investors will bid on outstanding debts owed to the borough from delinquent property tax payments, and in return will earn the right to put a lien on the properties in question, according to Altschuler.
When an investor wins the right to pay off the debts to the town, he can also begin foreclosure on the property if he chooses to, though both Altschuler and Conway said that foreclosures are extremely rare.

Caveat Emptor!


Blogger new 200 Mbps BROADBAND over POWER LINES said...

Will Bernanke Tank Housing?
JUNE 8, 2006
By Peter Coy
The housing market has gone from boom to gloom. And another rate hike by the Fed would make matters worse

Ouch. It's getting harder and harder for real estate agents to put a happy face on the market. Sales are slowing, prices are falling, and the backlog of unsold homes is rising fast. And now it's suddenly looking like the Federal Reserve will raise interest rates again.

As recently as June 2, the real estate biz was breathing a sigh of relief that the Fed was finally through with raising rates, after 16 quarter-point increases. But then Federal Reserve Chairman Ben Bernanke gave a hawkish anti-inflation speech on June 5 that strongly signaled another increase in the federal funds rate at the next rate-setting meeting on June 29 (see BW Online, 06/06/06, "The Chill in Bernanke's Words").

Bernanke's gladiator-like aggressiveness on inflation is producing scowls at the National Association of Realtors, which worries that higher mortgage rates will make the housing market even softer. The group put out a public statement on the issue this week, in which David Lereah, the Realtors' chief economist, said: "This is a time for the Fed to pause on rate hikes because we have some interest-sensitive housing markets that have become vulnerable."

BLEAK DATA. Lereah couched his plea for a "pause" in rate hikes with upbeat remarks about how 2006 stands to be the third-best year ever for home sales. He even said that the slowdown "is a good thing because slower appreciation will help to preserve long-term affordability." But it's clear that the Realtors' association isn't happy with the way things are unfolding. It predicts that existing-home sales will drop 6.8% this year, to 6.6 million, while new-home sales will tumble 13.4%, to 1.11 million.

Up until his June 5 speech, Bernanke gave the impression that he was being careful not to tank the housing market, vowing in congressional testimony on Apr. 27 to "monitor housing markets closely." Since then, though, the housing market has done nothing but weaken, points out David Rosenberg, Merrill Lynch's chief North American economist. Housing starts are down over the past three months at a 56% annual rate. "So Mr. Bernanke is 'monitoring,' all right," Rosenberg wrote in a report on June 7. "He's monitoring the collapse of the housing market, and by the sounds of it he wants to reinforce the bear market already under way."

Most economists don't think Bernanke is actually trying to reinforce a bear market in housing, but they do say that the market has turned decidedly bearish. Richard DeKaser, chief economist of National City in Cleveland, calculates that over the six months through April, median sales prices have fallen at a 4.4% annual rate for new homes and at a 5.6% annual rate for existing homes. (To do that calculation, DeKaser had to make his own seasonal adjustment to the numbers. As reported, the data show only year-over-year price changes, which are still positive.)

NO SOFT LANDING. Real estate stocks have been on a steep slide. Shares fell further this week after a downgrade by Wachovia Securities. Since their peaks last summer, Pulte Homes (PHM ), D.R. Horton (DHI ), Lennar (LEN ), KB Homes (KBH ), and Toll Brothers (TOL ), among others, have lost anywhere from one-third to more than a half of their stock market values. In a note to clients, A.G. Edwards & Sons wrote, "If it is not already painfully apparent, the soft-landing thesis for the homebuilding industry is dead."

One more quarter-point increase in the federal funds rate may not seem like it could have much of an effect on housing. But DeKaser points out that the market still hasn't fully adjusted to the rate hikes that have already occurred. In fact, he says, according to an analysis that he plans to release next week, some of the most overvalued markets are continuing to see some big increases in prices. That's setting them up for an even bigger fall to come, he says.

Mortgage bankers also see the market slowing, but they aren't echoing Realtors in asking for a pause in rates. That could be because they, like the Fed, hate inflation -- it erodes the value of the fixed-rate loans they make. "We've never publicly given the Fed instruction on how to conduct monetary policy," Douglas Duncan, chief economist of the Mortgage Bankers Assn., said June 7.

DANGER OF OVERSHOOTING? That said, Duncan noted there is still a danger that the Fed could overshoot and raise rates so high that they hurt the job market, which is the real underpinning of housing. "If employment falls, that could precipitate price declines and all the speculation that's supported the market would be expunged," says DeKaser. "You could see things swing the other way to where there's an irrational fear."

To put it differently, some economists say: What goes up must come down. One housing bear, Ian Shepherdson, chief U.S. economist for High-Frequency Economics in Valhalla, N.Y., wrote June 6: "Ultimately, we expect the level of home sales to head down to, or even below, the long-term trend. When bubbles burst, they usually burst properly. Gentle deflations are rare."

6/08/2006 09:48:00 AM  
Blogger RichInNorthNJ said...

Predatory lending still plagues borrowers
Federal Reserve hearing explores home-equity trends, concerns

Mortgage documents that inflate borrowers' income and real estate professionals who don't tell consumers the whole truth about their loans were two of the problems highlighted by consumer advocates at a Federal Reserve Board hearing Wednesday exploring trends in home-equity lending.

...Although consumer groups represented at a morning session agreed that certain HOEPA revisions were affective in helping consumers, they also came armed with stories from the field that told of people who still sign on to mortgages beyond what they can afford.
For instance, stated income loans, in which borrowers need provide no documentation of their income, are a concern to Daniel Lindsey, supervisory attorney for the Legal Assistance Foundation of Metropolitan Chicago's Home Ownership Preservation Project.
According to the paperwork of one loan, a client made $7,000 a month, Lindsey said. In reality, she only brought in a $1,000 Social Security check and $700 for a part-time housekeeping job. The client was never able to make a payment.

6/08/2006 10:13:00 AM  
Blogger FK said...

A good read on the if we didn't know!

6/08/2006 10:19:00 AM  
Blogger grim said...

Message board is up and running..

Anyone interested in trying it out:

New Jersey Real Estate Report Forums

(Yes, the name has changed).


6/08/2006 02:35:00 PM  
Anonymous Anonymous said...

Sorry Grim but,

the original boar is so much easier to read and scan through. Is it possible to continue using this board???

6/08/2006 09:59:00 PM  

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